Ramokgopa's electricity pricing review promises relief for struggling families
Minister of Electricity and Energy Kgosientsho Ramokgopa admitted that electricity prices in South Africa have increased sharply over the years.
Image: GCIS
Relief may soon be within reach for many South African households as the government prepares to tackle the escalating electricity costs that have burdened families for years.
Earlier this week, Minister of Electricity and Energy Kgosientsho Ramokgopa admitted that electricity prices in South Africa have increased sharply over the years, far outpacing inflation and putting a heavy strain on families and businesses.
He said that between 2007 and 2023, electricity prices in the country surged by almost 1 000%, while inflation over the same period rose by about 150%.
"We do appreciate the fact that there has been an exponential rise in the cost of electricity. Just a startling figure, between 2007 and 2023, electricity has gone up by 987%, and inflation has gone up in the same period by 150%," Ramokgopa said.
"That tells us that we are significantly below the disposable income of households. Household consumption constitutes over 60% of South Africa's GDP, so we are stunting growth in the country. But also undermines the ability of the industry to compete".
To address the rising costs, Ramokgopa said the government is finalising a new electricity pricing policy.
He explained that the policy aims to:
- Introduce structured pricing categories, including considerations for high-consumption users.
- Provide relief for low-income households, including measures like free basic electricity for qualifying families.
- Bring predictability to electricity costs, helping households and businesses better manage their budgets.
The minister said the policy is going through Cabinet approval and is expected to be made public before the end of May.
“We have finished the pricing policy, just going through the approval processes in the government, and we are taking it out to the public. But there's a special category of consumers that deserves particular attention, and really, that's the poor.
Last month, he said that the current free basic electricity allocation for indigent households will also be reviewed.
Ramokgopa said the review of the 50 kilowatt per hour per household free basic electricity will form part of the electricity pricing policy that will soon be released for public comment.
He said the free basic electricity was introduced in 2003 after the realisation that although electricity was available to many of the households, it remained expensive.
He stated that the free basic electricity allocation was determined based on the consumption profile.
“Twenty-three years later, that number is no more relevant because the profile of consumption has changed, and the average poor household now has a television. Some of them have bought electric kettles, they have got refrigerators, so the consumption has changed,” he said.